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Will Broadband Internet Metering Hurt SMBs?

As some major ISPs test usage-based Internet service plans, startups and other smaller companies worry that "metering" could adversely affect how they do business.

Could the broadband Internet boon enjoyed by so many small businesses soon become a burden?

The scenario sounds farfetched in an age when high-speed Internet access is commonly considered a given, right up there with indoor plumbing and electricity. But that assumption is linked with another one: Unlimited bandwidth for a fixed price. While that's readily available in much of the U.S. today, major Internet service providers (ISPs) are testing new ways of charging customers based on their actual consumption instead of a fixed-rate model--not unlike how power utilities bill electricity by the kilowatt hour. Perhaps a better comparison is the overage charges that wireless providers levy on customers who exceed their plan's allotted voice minutes or data in a given billing cycle.

Time Warner Cable is currently piloting a metered plan called Essentials Internet Plans in parts of Texas. It offers customers a $5 monthly discount in exchange for opting into a 5 GB monthly bandwidth limit; each additional GB costs $1, up to $25 extra per month. Those data allotments and price points are obviously aimed at light home users, not businesses, but some feel that the program is a precursor for a wider industry change: The end of the all-you-can-eat bandwidth buffet.

"Metered broadband business service is coming and it'll be sooner than anyone expects," said Michael Bremmer, CEO of Telecomquotes.com, via email. "It drives [ISPs] crazy that they can't bill by the byte yet."

Comcast will begin testing usage-based broadband service in Nashville, Tenn. on August 1, with plans for a similar trial in another unannounced market to follow. "We’re introducing a data usage management approach in Nashville that is pro-consumer and pro-innovation and provides customers with more choice and flexibility," said a Comcast spokesperson via email.

The Comcast program will actually increase to 300 GB the current 250-GB monthly cap the company enforces among its broadband customers. After an initial grace period, Comcast will charge $10 for each additional 50 GB a customer uses beyond that allotment.

Gartner analyst Robert Mason notes that midsize companies and large enterprises that provision their own dedicated connectivity and networks aren't likely to be losing sleep over the concept of broadband metering. The reason: They usually buy in bulk. "They're going to be able to have a lot of leverage over the provider in terms of what they get," Mason said in a phone interview. "They're going to be OK."

Small businesses that acquire broadband at retail, on the other hand, are on edge. "This is a huge concern for us," said Jeanne Achille, CEO of the Devon Group, via email. "The always-on, unlimited bandwidth model of the Internet is [how] we've built our ability to serve a global client base."

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joanie.mann@gma...

User Rank: Apprentice

Fri, 07/27/2012 - 13:13

re: Will Broadband Internet Metering Hurt SMBs?

There are arguments that say running "thin" clients and accessing remote apps and services is a way to mitigate the impacts of bandwidth metering in the office. Then, you add VOIP because it goes really well with online apps and services, enabling that whole "work from anywhere" idea, and you rapidly learn that it's most affordable if everybody does actually work from anywhere... anywhere but the office, because the broadband charges are once again too high.

1majones, thanks for comment. VoIP was mentioned as a concern by just about every SMB I heard from for this piece. No matter what they do or what other online apps they use, VoIP was consistent across the board. -Kevin Casey